Don’t Compete: Create!

A reader sent in this interesting article from the NY Times about competition and innovation yesterday. He said it might be “a bit heady.” You’ve been warned.

My favorite paragraph:

One of his core points is that we tend to confuse capitalism with competition. We tend to think that whoever competes best comes out ahead. In the race to be more competitive, we sometimes confuse what is hard with what is valuable. The intensity of competition becomes a proxy for value.

In fact, Thiel argues, we often shouldnâ€™t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, itâ€™s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too.